NEW DELHI: Bharti Infratel, the tower arm of India's largest mobile phone operator Bharti Airtel, plans to raise about Rs 4,500 crore through an initial public offering (IPO) opening on December 11.

The IPO of nearly 189 million shares, priced between 210 and 240 a share, will be the largest share flotation in the country in the last two years and the second from the Bharti Group after nearly a decade. The shares offer will result in 10% equity dilution in the company and reduce Bharti Airtel's stake in the subsidiary from 86.09% to 79.42%.

The IPO closes for the general public on December 14. The offer period for institutional investors is December 10 to 13. The last big-ticket IPO in the country was in October 2010, when state-run miner Coal India had raised 15,200 crore.

Bharti Infratel plans to use three-fourths of the proceeds from the IPO to add more towers, increase its market share and scout for acquisitions in India and overseas, its vice-chairman and managing director, Akhil Gupta, told reporters on Friday. "There could be opportunities of acquisitions of existing towers and other global opportunities. We will see as and when the opportunities arise," Gupta said.

The IPO comprises about 146 million new shares and a secondary sale of 42.67 million shares by Temasek Holding, Goldman Sachs, Anadale and Nomura, the company's stockholders who will get the remainder of the cash proceeds. After the IPO, the combined stake of these four private equity firms will drop from 13.91% to 10.58%.

Bharti Infratel, which owns 34,220 telecom towers in 11 circles, holds 42% stake in Indus Towers, the world's biggest tower firm. Indus has a portfolio of 110,561 tower in 15 circles. On a consolidated basis, Bharti Infratel has economic interest in 80,656 towers. The company plans to reduce dependency on conventional fuel for powering its towers by switching to renewable energy sources at several remote locations.

Bharti Airtel's shares have gained 21% since the filing of the draft prospectus with the market regulator on November 14. On Friday, its shares closed 2.12% up at 337.15 on the Bombay Stock Exchange.

Bharti Infratel is the first tower company to tap the capital market. Reliance Infratel, led by Anil Ambani, had earlier scrapped a planned public offer to raise about 6,000 crore.

The success of the Bharti Infratel IPO will keenly watched by the telecom industry, which has been battling regulatory uncertainty and weak investor sentiment for more than a year.

While market pressures have resulted in consecutive quarter-on-quarter losses for some companies, a recent Supreme Court order on telecom licences has forced operators to go slow on rollouts, reducing business for tower providers.

On whether Indus Towers would also take the IPO route, Gupta said, "Indus can, after a while, definitely think of an IPO, but not right now."